Audit exposes serious flaws in Brampton’s already questionable use of taxpayer dollars when handing out contracts

A new report from the City of Brampton’s internal audit department has exposed a serious flaw within the municipality’s procurement processes that allows City staff to hand out sole-sourced contracts without declaring a conflict of interest. 

This means, for years, staffers at City Hall have been able to procure goods and services, spending millions of taxpayer dollars, without declaring if they have any personal connection to the person or business receiving the deal. 

According to the audit, under the current rules, the requirement for disclosing “actual, potential and perceived conflict of interest” does not apply to limited tendering (the new label for sole-sourcing). In public procurements, declaring any conflict of interest is standard practice. 

This significant gap opens the City up to serious risk, the report states, noting “it might allow for certain suppliers to gain an unfair competitive advantage and exclusive access to City contracts due to a lack of transparency and impartial assessment in the procurement process.”

Limited tendering, or sole-sourcing, is a purchasing practice used “in exceptional circumstances” the report states, and allows the City to speed up the purchasing process for goods and services for things like emergency repairs, or for specialized services offered by a limited number of vendors. This differs from the public procurement process in which the City solicits requests for proposals (RFPs) and chooses the best option, which is viewed as the most transparent and responsible method for spending taxpayer dollars. 

While the majority of City contracts are handed out through public procurements, sole-sourcing still accounts for millions of dollars in purchases every year. The fact that staff, for years, have not been required to declare any conflicts of interest, raises serious questions about all sole-sourced contract awarded by the City of Brampton in recent years. 

The audit analyzed contracts handed out in the second quarter of 2023 which amounted to $95.1 million of public money. Over a quarter of these (26 percent) were awarded through limited tendering, totally nearly $12 million. Four of the 15 sole-sourced contracts, accounting for the majority of the dollar value ($9.45 million) were approved by city council, but the remaining 11 were awarded without oversight from elected officials. Further, the second quarter of last year also saw nearly $30 million awarded through contract extensions and five of these contracts, valued at $8.2 million, were initially awarded through limited tendering. 

Along with the lack of conflict declaration, the audit also uncovered that when limited tendering is used, staff do not always provide the proper documentation to justify why this method is required over an open, public process. 

Four of the 16 contracts awarded through sole-sourcing in the second quarter last year did not include “appropriate key documents to substantiate the limited tendering procurements”. Staff were also found to be providing improper justification for limited tenders, relying on outdated information or awarded contracts based on the word of the purchasing department without written documentation. 

It’s unclear whether the City will conduct any investigation into these procurements given the limited oversight, and the lack of requirement for declaring a conflict of interest by staff. 

To improve City processes, and eliminate what auditors described as a process that compromises decision making, undermines the “integrity and reliability” of local procurements and erodes public trust, the report recommends changing the Procurement Bylaw to include a conflict declaration for limited tendering as well as the creation of standard operating procedures that dictate the documents and justifications required for choosing a sole-sourced method of procurement. City staff have agreed to the recommendations and will be working to implement a conflict declaration by April of this year, and the creation of standard practices by the end of the second quarter. 

These revelations about Brampton’s flawed purchasing practices are only the latest in a long line of controversies that have surrounded Brampton and council’s purchasing history. These issues have repeatedly drawn the attention of the Ontario Ombudsman. 

In 2017, following repeated public complaints, the Ombudsman opened a sweeping investigation into procurement practices in the city. While finding no evidence of “maladministration”, Paul Dube identified a number of areas of improvement, including within the City’s non-competitive procurement practices, i.e. sole-sourcing contracts. 

“The city of Brampton’s recent past is filled with controversy, leading some members of the public, as well as members of council, to lose trust in the city,” Mr.Dubé stated in a 2017 report.

“Establishing an independent, permanent auditor general would help re-establish the public’s confidence in the city and ensure that the public trusts the city to act fairly, accountably and transparently. I urge the City of Brampton to consider this best practice.”

The City of Brampton has yet to create an auditor general’s position, and this failure can partially be blamed for how nearly $700,000 could be handed to connections of Mayor Patrick Brown and Councillor Rowena Santos as part of the failed Brampton University plan. 

During the botched effort to create BramptonU, hundreds of thousands of taxpayer dollars were handed to close friends of Councillor Rowena Santos and Mayor Patrick Brown.

(City of Brampton)

From the start, the scheme was marred by questionable procurements to hire consultants with close ties to Brown and Santos, secretive processes  and unfinished work. In the end, BramptonU was abandoned, and taxpayers were stuck with a $630,000 bill. The money went to friends of Brown and Santos, which council never knew about, and much of the work they were paid for, was never done. The price tag for the work Rob Godfrey, one of Brown’s closest friends, was supposed to do went up by three times the limit approved by council, and they were never told how this happened behind their back. Much of the work he was paid for was never done. Brown has refused to answer any questions and investigators were unable to interview him before the mayor had the probes cancelled at the end of August, 2022, weeks before the last municipal election.

Previous reporting from The Pointer had unpacked the connections the contracted companies had to Brown and Santos. After multiple complaints about these matters to the provincial Ombudsman and his recommendations issued to council for members to use their authority to launch investigations, the advice was taken.

In May of last year, the Ombudsman once again wrote to council expressing disappointment over Brampton’s repeated failures to update its procurement practices and its ongoing failure to transparently investigate complaints from the public. 

As written in the Ombudsman’s May 8, 2023 letter, “the Ombudsman proposed several best practices aimed at improving not only Brampton’s procurement practices, but also the public’s trust in them. These included the establishment of a permanent, independent municipal Auditor General, as the cities of Ottawa and Hamilton had done.” The letter went on to say the Ombudsman was continuing to receive ongoing complaints after an earlier report on the City’s questionable practices. “[I]t is unfortunate that five years after that report, we are receiving complaints that express distrust in Brampton’s procurement practices.”

Questionable procurements in Brampton extend back beyond this current council. 

In 2011, a lawsuit was launched by Inzola Group, which had been disqualified the previous year from bidding on the Southwest Quadrant development to expand City Hall. The lawsuit sought more than $28 million in general damages, breach of contract and negligence and punitive damages.

The lawsuit alleged Inzola was unfairly disqualified and evidence in the case showed senior staff, no longer with the City, secretly directed at least $480,000 to help advance the bid of the eventual builder, without councillors ever knowing about it. Despite the former mayor, Susan Fennell, signing off on the secretive use of almost half a million dollars from taxpayers to help the eventual bid winner, she claimed she did not know what she was signing when she approved the alarming move. In 2021 a judge ruled in favour of the City, deciding no bias against Inzola was found but evidence at trial highlighted significant wrongdoing by senior employees in the use of taxpayer funds.

Email: [email protected]

At a time when vital public information is needed by everyone, The Pointer has taken down our paywall on all stories to ensure every resident of Brampton, Mississauga and Niagara has access to the facts. For those who are able, we encourage you to consider a subscription. This will help us report on important public interest issues the community needs to know about now more than ever. You can register for a 30-day free trial HERE. Thereafter, The Pointer will charge $10 a month and you can cancel any time right on the website. Thank you